Turkey’s Offer To Cyprus: Turkish Lira

Offering to step into the breach to help Cyprus during its crushing economic crisis, Turkey – whose troops still occupy the northern third of the island unlawfully since invading in 1974 – said it would support an eventual transition to the use of the Turkish Cyprus Lira in Greek Cyprus, the currency Turkish Cypriots use, if Cyprus is forced out of the Eurozone, EU Minister and Chief Negotiator Egemen Bağış said.

The minister, speaking at an event in Istanbul, argued that if the Greek Cypriots had approved the U.N. reunification blueprint in 2004, known as the Annan Plan, it would have been spared its recent economic woes. “(President) Nicos Anastasiades’s government is paying the price of the (previous) leadership and trying to put the pieces back together. It’s not proper to kick someone when they are down. God save them,” he said, noting that Cyprus’ President backed the plan that Greek Cypriots overwhelmingly rejected nine years ago.

“We hope that they will reach a solution and the uncertainty will come to an end as soon as possible,” Bagis said as Cyprus struggled to find a way to come up with 5.8 billion euros ($7.5 billion) to trigger release of 10 billion euros ($13 billion) in international aid. The European Union has given Cyprus until the end of March 24 to devise a plan before cutting off liquidity to the central bank which could bring down the economy.

Turkey is also on alert for the long term knock-on effects that such a bailout could entail for Europe. Only Turkey recognizes the government in the part of the island it occupies and the Turkish Cyprus Finance Minister said that if Greek Cypriot banks went bankrupt, Greek Cypriots might open accounts in Turkish Cypriot banks.